London's Power Play Proves Cities Can Fight Uber

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London's Power Play Proves Cities Can Fight Uber

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Cities have a love-hate relationship with Uber. On one hand, the San Francisco ridehailing giant has exploded transportation options for those with smartphones and a bit of extra cash. No more need to drive tipsily back from a night on the town. No more waiting for a taxi that may never arrive. No more crowded, slow public transport. Uber is fast, Uber is cheap, Uber is easy.

Uber is controversial. Extra cars picking up, dropping off, and wandering around for fares can worsen traffic and air pollution. The service raises questions about the rights of workers in the gig economy, and about the safety of drivers and riders alike. That leaves cities wondering if the upsides of having Uber around outweigh those consequences.

London thinks not. In a shock decision Monday, the city’s transportation authority declined to renew Uber’s operating license, citing the company’s approach to criminal offense reporting and driver background checks, and Greyball, the software program Uber has used to evade regulators in places like Portland, Oregon, and France. Uber will appeal the decision, and can stay on the road until the courts make a final decision.

“As Mayor of London I welcome innovative new companies that help Londoners by providing a better and more affordable service—but providing an innovative service is not an excuse for not following the rules," London Mayor Sadiq Khan said in a statement.

It’s unclear how long that legal process will take, and whether TfL and Uber could find a compromise without the lawyers duking it out. What is clear is that London has found a way to fight back against a company that has built a reputation for defying local government without repercussions.

“Creativity can take a while,” says Jon Orcutt, the former head of policy at New York City's department of transportation and now communications lead at the research organization TransitCenter. “Cities are acquiring some confidence to re-confront these these guys, and figuring out where they have the policy leverage.” Turns out it just might be possible to play hardball with Uber.

The Facts

London’s issues with Uber are manifold. By 2015, 78,000 private for hire vehicles choked the streets of the already congested city, an nearly one fifth of them Ubers. Transport for London has made no secret of its displeasure with the company. In 2015, it proposed a raft of new regulations for private hire vehicles, even suggesting making Ubers wait five minutes after booking before picking up a customer. It dropped those amid public pressure, but continues to bat around ideas like capping the number of private for-hire vehicles in central London.

This summer, though, TfL’s concerns took on a more urgent bent. A letter from the Metropolitan Police highlighted nine separate events where they felt Uber had dragged its heels in reporting crimes. In one notable incident, a driver who had inappropriately touched a rider got off with a warning, and went on to repeat the offense. (Uber says the incident was in part a misunderstanding, and that it has since established a working group to ease collaboration with the police. “We obviously dropped the ball there,” says Harry Porter, an Uber spokesperson.)

After Transport for London announced it would not be renewing its license, usually-pugnacious Uber struck a conciliatory tone. “On behalf of everyone at Uber globally, I apologise for the mistakes we’ve made,” new CEO Dara Khosrowshahi wrote in an open letter. (Note the courteous English spelling.) “You have my commitment that we will work with London to make things right.”

It’s a departure for Uber, which has historically preferred fire, fury, and petulance to diplomacy. This is the company that ended service in Austin after the Texan capital imposed regulations like fingerprinting drivers. The company that launched an ultra-snarky in-app de Blasio mode when New York’s mayor threatened to cap the number of its cars. (De Blasio backed down.) London, though, may be too important for the not-yet-profitable company to lose. With 3.5 million riders, London is Uber’s biggest European market. By yanking that operating license, London has found itself a big bargaining chip.

That’s not to say that Uber’s at a complete disadvantage here. In addition to its Khosrowshahi letter, the company also launched a Change.org petition railing against Transport for London and Mayor Khan, garnering nearly 800,000 signatures. Public support doesn’t have any bearing on Uber’s right to operate, in theory, but Khan is a politician, and TfL takes orders from him. London’s unhappiness could make push Khan to go easier on Uber.

Plus, pushing Uber away looks bad from the outside. “The city is quite, quite vulnerable in that regard because London does want to present itself as a tech capital in Europe,” says Tim Schwanen, who directs the Transport Studies Unit at the University of Oxford and has studied the politics of Uber in London. Is the city reallyopen for business?

Making Friends?

Perhaps it’s because of this backlash that Khan publicly requested TfL sit down with Uber, to work out their differences. But curiously, it's not quite clear what those differences are, exactly. Uber’s London chief, Tom Elvidge, says the company has “always followed TfL rules on reporting serious incidents.” TfL declined to elaborate on the specifics of what it seeks from the company.

There’s probably a legal reason for keeping mum. The city has presumably put together what it hopes is an ironclad case against Uber, one thoughtfully grounded in TfL’s regulatory authority to oust the ridehailing ruffians. In fact, it’s unclear if the city would even grant a license if Uber offered concessions. Perhaps this is a bid to put Uber out of business, once and for all.

If TfL is willing to negotiate, there are a few things that might make it happy. Maybe Uber could limit the time its drivers spend on the road, fighting off driving fatigue in the process. Maybe the company could drop its appeal on last year's high court ruling that it must treat drivers as employees, handing over sick and holiday pay and minimum wage. Or maybe it could escalate its already ambitious play to convert to an all-hybrid and electric fleet by 2020. Why not go all electric?

Whatever the outcome, expect other city leaders to be watching. “The public sector is pretty slow to react, and in urban transportation terms, Uber’s been around the blink of an eye,” says Orcutt. Perhaps London’s move is a sign that cities are learning how to flex, and make Uber do some work for them—even if they aren’t as big or valuable as the land of pea soup fog.

"TfL has kind of thrown into question now this whole idea that these services are inevitable, that these technological developments in how we provide mobility cannot be stopped," says Schwanen. “It feels as if we’re in the midst of a great experiment."